Local Global

I needed new running shoes for one of my kids, so we went to a nearly big box athletic store. On a whim, I decided to check Amazon with my phone, which offered the same shoes, once taxes were included, for half the price. However, I’ve been wondering, since ordering them online, whether I’m contributing to the demise of local retail.

I apparently am not the only one who is using these online options. Ten million people, according to Amazon, tried its Prime subscription service for the first time this holiday season, and Amazon customers placed ten times the orders with same day shipping this year over last year. At the same time, Amazon shipped to 185 countries this holiday season, and its total US holiday sales with its smartphone app doubled this year.

Some argue that these rates not only threaten local retail but suggest bigger problems. Economist Robert Reich, for instance, maintains that this growth means the loss of mom and pop places in 15 years and big box retailers in 25 years. Moreover, he is concerned that concentrated economic power siphons capital from less powerful producers and from consumers, as well as leads to concentrated political power, and that this growth rate jeopardizes the primary source of jobs since 2009, which could be eliminated in the future.

Although I’m obviously no economist, I wonder why Amazon, in using digital tools to connect demand and supply, isn’t simply creating more efficient markets. As such, wouldn’t Amazon just be a recent stage in the same process that also produced big box retailers (and department store catalogues) that have threatened mom and pop places?

Perhaps these conditions are less fears for our future and more features of our system, which is potentially powerful but requires regulation to make this power more productive than destructive.